Neil Patel

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Arthur Waller is now on his second company. Having successfully exited his first startup, he has already raised a substantial amount of capital for his new fintech adventure. The company, PennyLane has attracted funding from top-tier investors like Partech, Sequoia Capital, Global Founders Capital, and Kima Ventures.

In this episode, you will learn:

  • How PennyLane is transforming the future of financial data and decision making
  • Scientifically testing your ideas and growing your business
  • Arthur Waller’s top advice for other aspiring entrepreneurs


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For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

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Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).

Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.

About Arthur Waller:

Arthur Waller studied economics and econometrics at Sciences Po and Ecole Polytechnique. Then he interned at the IMF in Libreville (Gabon) working on bank monitoring and the selectivity of custom controls. After this, he interned in the Global Investment Research Department at Goldman Sachs in London. Arthur supported his team in applying economists’ forecasts and industry specialists’ analyses to GS’ portfolio strategy recommendations (sector, index, and country levels).

Then, using his economic and econometric skills, Arthur founded PriceMatch with some friends (mostly economists and software developers). PriceMatch focused on industrializing and democratizing revenue management. They build algorithms predicting future demand and giving price recommendations to hotels.

PriceMatch has been acquired by in May 2015, and integrated within its new B2B software suite for hotels, called BookingSuite.

After 3.5 years at Booking, first BookingSuite and then in the Pricing Department, Arthur took some time off to travel the world with his wife.

Arthur is a startup enthusiast and occasionally also an investor and mentor. His latest venture, PennyLane is making waves in the world of entrepreneurs and startups.

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Connect with Arthur Waller:

Read the Full Transcription of the Interview:

Hey, guys. Today’s episode is brought to you by Zencastr. I remember back in the day when I was looking at putting together Zencastr. I was looking for a solution that would help me in putting things together. Essentially, this is what allowed me to bring DealMakers to life. Basically, Zencastr, what it is is an all-in-one solution where you just send a link to the person that you’re looking to interview. They would plug in their computer with their video, with the audio, and then you are good to go. You would piece everything together, give it to your audio engineer or even edit it yourself, and you are off to the races. Now, if you’re looking at getting into podcasting, you should definitely check Zencastr out, and you could also get a 30% discount, and this is the discount code that you will be able to redeem by going to Lastly, I was very much blown away when I found out that investing in wine has been one of the best-kept secrets amongst the wealthy. This is now not the case anymore. I came across this solution, which is called VinoVest, and they are a great solution that allows you to diversify investing by implementing or including wines into your portfolio. Take a look at this: wine has one-third of the volatility of the stock market, and yet it has outperformed the global equities market over the past 30 years with 10.6% annualized revenues. It’s a really good way to diversify your portfolio, and you could also get two months of free investing by just going to, and by going there, you will be able to redeem your discount.
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Alejandro: Alrighty hello everyone and welcome to the dealmakerr show. So super super excited with our guests today I mean we’re gonna be talking about fundraising acquisitions acquisitions you know, really that happen as a result of maybe like a fundraising event I mean you name it. But I think that we’re gonna really enjoy and be inspired with our guests today. So I guess without farther ado let’s welcome our guests today. Arthur Waller: Weer welcome to the show. So Arthur Waller: so give us a walkthrough memory lane here. So you are born in.

Arthur Waller: Um, thanks a lot for having me aleon of.

Alejandro: Paris in the suburbs of Paris so how was life growing up and.

Arthur Waller:  I can’t complain I had a good good shyut in the suburb of Paris um, and you know when I was 18 went to to college in Paris studied economics and and mathematics and then ah even went to broad for for. A study abroad year at and Nyu in New York and that’s when I heard for the first item about the startup that built a dynamic pricing system for ah baseball clubs in the us and I came back I started my master in the. Ah, economics and econmetrics ah did 2 internships working for Goldman Saxon for the if actually didn’t like it so much and that’s what pushed me into entrepreneurship. Um, and because I liked to lot the idea of of dynamic pricing for baseball tickets. I tried to think how we could apply it to you know, either the same ticketing industry or another industry in Europe and with some friends of high school and college. We ended up ah launching price. Much.

Alejandro: So then how were the early days of price match.

Arthur Waller: Ah, so back then I was 22 years old ah didn’t know anything but an entrepreneurship didn’t have anyone in my family ah being an entrepreneur and so. We basically were a group of of friends in our University’s Incubator um and we made lots of mistakes obviously and so first it took us very long to come to identify the right market something like four or five months decide that the hotel industry was the right market for for us then it took us probably five months to build the and Mvp ah, which we brought to market and and then we raised our seed round. Ah six months later so in total it took us eighteen months ah from the moment we started working in it till the moment we we raise our seed round The good thing is that we were 22 we didn’t have kids. We didn’t have families and and so it was all bootstrapped with ah student loans and and it was fun times. Um.

Alejandro: And how and and and in this case I mean just a lot. The people you know listening really really get it What what was the business model here with price points. How were you guys making money

Arthur Waller: And and yes that yeah.

Arthur Waller: So it was a pure Sas business selling software to hotels and the hotels would pay ah pay us a saas license to you know, be able to get our price recommendations was a decision making tool. Um, and so on average we would charge two hundred and fifty Euros per month per hotel.

Alejandro: And how you were you are alluding to it but this was obviously your first company and when it’s your first rodeo. It’s not as easy to raise money. So how did you go about capitalizing the business.

Arthur Waller: So and and and really back then in France. Ah you know startup was not what it is today. Ah so I didn’t I also didn’t have really friends that had done a startup before and so we kind of randomly. Ah.

Alejandro: Right.

Arthur Waller: Fell into fundraising and andvc. So. It’s actually a french vc called Parte ah, who got in touch and said they heard about price patch I had no clue that you know what we had could be finance, etc. Um, and so we met with them. They said you know you guys need to be more ambitious. You have a great product. But if you want to grow you need to to go to market and for this, you need to hi salespeople and you need to do it in friends but also grow broad etc. And so we raised um one million Euros Seatd round with them back then and they were really so Roman Lavu who is the the partner. He’s still. And it’s also ah ah on the cap table and our in our new company was really advocating for us to be more aggressive. We were very lean because you know we started the company and had really little money so the first eighteen months I think we we spent maybe like you know. Hundred hundred Twenty Thousand Euros something like this in eighteen months we had only interns we were not paying ourself etc and so we really had to change our our mindset ah to become more aggressive. There was one us competitor that had started at the same time same time as us that was really wellended. And so that’s also what pushed us you know realizing you know you might have the good. We might have a good product if we don’t become more aggressive in terms of sales and go to market then they will eat us and so the moment we started raising the money. That’s when we really accelerated and then you know. In the next twelve eighteen months we grew the company from 20 to about 100 people and and we were doing well we had ah sign a big deal with the with Akor which is the largest european hotel company. Ah, and we were going to raise our series a to go into more serious growth and we had ah we had signed a term sheet with some investors some swedish investor. Um, and that’s the moment when I randomly met with some booking. Folks at the tradehow. Ah and you know I was trying to so we were trying to go to market either directly to hotels or through other hotel technology companies that would integrate us in web label and resell us. And booking dot com had just made a push into the b two b hotel tech space. They had both a company out of Seattle and another one in Barcelona ah building technology for hotels and I was telling them. You know you have several pieces but you don’t have rough management. Why don’t you white label our technology and and distribute it and I so.

Arthur Waller: We had a really good fit with the with the person I was who was my contact person at booking and then we we acquired a very small competitor of us in Amsterdam so I ended up traveling back and forth to Amsterdam and every time grab the coffee with with people at booking and. Ah, realized time after time that the questions were becoming more and more ah serious. Let’s say and at one point I got a call ah from my contact person at booking who said we might be interested in ah in acquiring price match. Um. And I I chatted with my cofounders and I told them it might be a good time because um, you know we had only raised one million Euros the founders we still own 75% of the company and the moment you do your series a then it’s another. Sorry right? The company becomes more expensive. You need to grow much much more and so I told them you know if you are really interested. We need to move fast because it’s it’s now or or probably not tomorrow. Um.

Alejandro: So then so then what happened I mean how how long did it take how many conversations to get to that point of you receiving that phone call and then what happened next.

Arthur Waller: So I probably met with had like maybe 4 or 5 meetings before that phone call. Um and those meetings were I would say you know? ah so with more and more senior people ah in the company. Ah, and then once we had that phone call. Ah we had to discuss about the terms obviously um and that that took longer than what I expected ah probably about I would say a month and a half ah two months maybe till the moment we got ah an actual term sheet a letter of intent that everyone kind of agreed on ah and then we signed that letter on intent and then I would say two extra months from that moment to the to the closing. Ah and and the you know the the scary thing with us. That we were about to raise our series a ah we had already signed the loi so we had already anticipated that we were going to get the cash and so we were burning. You know, quite some money and had nothing left in the bank. Um, and so it was risky for us because we had to basically cancel our series a to explore ah the acquisition with booking and first we needed cash to finance ourself during those discussions ah and booking actually offered to lend us money during the discussion but you don’t want to be dependent. Ah, of the person you are talking negotiating with ah and and then if the conversations didn’t go through then we were in big trouble. We were hoping that the investors we had been dealing with they would understand and they would get back to the table but it was nothing was sure.

Alejandro: And I’m kidding no kidding.

Arthur Waller: And we were really lucky to find on our way our banker ah from b and p parabas who actually gave us a one million Euros credit line without any warranty. Ah so he was also lp in our investor but he said I trust you guys and. And that’s how we got finance during all those discussions so it was um was a fun. Best.

Alejandro: Wow! So unbelievable and and then the transaction basically was over 50,000,000 so incredible. Incredible, outcome for the first business now. 1 thing that is very interesting here is that on price match. You know you have or you had 6 cofounders. And now in your new company penny lane. You have 7 co-founders. So I mean it sounds like you go to like a party and everyone becomes a co-founder. What’s going on how how do you manage so many co-founders saying there’s a lot of egos there to manage.

Arthur Waller: Yes, so I think in the first company everyone when we started told us ah you know you guys will never keep together. You’re gonna be fighting all the time etc. Ah, and in the end we felt that. You know it was great because we had a lot of work and it was. We were quite complimentary so we felt as long as each cofounder has a very clearly defined scope and you don’t overlap then things go well. Um, and so we ended up you know. Selling the first company being 6 and and and and happy and remaining good friends and so when it was time to launch penny lane. So we are 7 cofounders. You’ve got 4 of the 6 cofounders of the first company you’ve got. Another one who is ah 1 of our first employees of the first company who is a co-founder now and you have 2 new ones who came ah extra and yeah again I think the the scope is really clearly defined. We have a lot to do. And we’ve been working together for a long time. So I think when you launch a company. It’s actually you know if you do if you get all the all the upside of having ah you know 7 c level people that know each other well ah you know, trust each other It’s actually ah a real. A real secret source. Um, so I think we are we are lucky that it it works well um, we are basically you have 5 of them that really have like teams that they manage and then 2 of us. Ah Felix who is the Ceo and and and me who is the Ceo. We don’t have teams directly. And we we focus more about a certain area of the business and and more transverse you know stuff like strategy and stuff like this.

Alejandro: Nice now Penny Lane so obviously the company is acquired by booking you do the vest and resting as they call it and then eventually you come across the next idea the next idea Penny Lane so how did the idea come to you and what was that process like of ink from incubation all the way to louning it.

Arthur Waller: Yes, so I think you know while we were at at booking 1 thing. We’ve done is we reinvested quite some money into the the style of ecosystem in Paris ah, and we were. We had the chance to see you know what worked and what didn’t work for. Other ah projects. Um, and we felt that the project that worked the best among those that we invested in were the ones that had a very what I would call scientific approach to ideation and in that sense I mean people that really validate it. Is a problem my solution to that problem is perceived as such by people in the market and those customers are willing to pay for my solution and really in that in that order. Um, and so we’ve really tried to look for an id we set some criteria. Yes. Um, so our criteria as we’re we are looking for a very large market a market where tech would make the difference and ideally a replacement market instead of ah evangelization one. It was maybe our biggest frustration with our first company. That 80 person of hotels would tell us I love your product your software It’s great, but you know what I’m going to stick to excel because I don’t want to create a budget for this? Um, and so this time we’re looking for a market where people already have a budget. They already pay for some software but you need to come and do better and so. We’ve tested many ideas. It took us about four months but talking to small business owners entrepreneurs around us when we asked them what is your day-to-day struggle. Um accounting and financial management came back all the time and so it sounded quite vague and and quite vast as well. And wrote but we ended up doing very heavy user research talking to about 120 people and what they all told us was I love my accountant he or she is my local trusted advisor but I don’t have the right tools to work with him or her and I’m lacking. You know a place where I can log in and see all my financial data if I’m a big company I have a erp if I’m a small company I don’t have any yeah rp I don’t have that that single source of truth of financial data and so that’s what we decided to to go for.

Alejandro: Now What were then now that you decided to go for that Then what were the next steps after that.

Arthur Waller: Um, so during that ideation phase. Um, you know I wanted to validate that there was a real need from customers etc also wanted to get the feedback from some investors I knew in the market and there’s 1 investor that you know. Introduced me to lots of his portfolio companies gave me a chance to do user research with them was a good sparing partner. This investor is ah David Sanef from global founders capital um, and so the moment we you know had done our user research he came to me and said I see that you guys are moving fast and. Really It’s rating quickly on on your on validating or invalidating your assumptions I trust the team I’m willing to invest. Ah you know in in preseed or seed into your new company. Initially we were not thinking of raising money. We said you know we have capital. So let’s use this. But he convinced us this. You know we could move faster and take more risks if we actually raised some money and it’s also what we wanted to I mean the goal is to build a really big company that that we’ve built ah a first one. Um. And so we raised three million Euros or four million Euros when we launched Basically when we incorporated the company in January Ten twenty

Alejandro: And and before really diving into the into the actual financing there. How how does how do you guys make money in Penny lane. You know what’s what’s the the business model.

Arthur Waller: Um, so the maybe maybe the people that listen to us are familiar with some other companies that kind of do the same as penny lane but in other markets so there are 2 namely called Quickbooks from intwit and 0 ah, from New Zealand and those 2 companies what they’ve done is exactly what they described bring together on 1 same platform the accountant and the customer the and so our business model looks pretty much the same than than theirs. So we charge Sas fees. Ah, either to the accountants or to the Sme depending on the case so that’s the first you know source of revenue and then what we are building is basically the financial operating system of those sms and those accountants and so in the future. We also want to get revenue from building the app store. On top of that operating system and in our case, it’s going to be an app store of financial services so being able to distribute to those Sme credit credit cards financing insurance health care. Whatever and and get a very small sure. Ah. Because we build the infrastructure that allows to distribute to services.

Alejandro: And going back to the fundraising so that what’s the total amount of money that you guys have raised so far.

Arthur Waller: I believe it’s eighty five million years

Alejandro: Okay, eighty five Million Euros now in that case I mean obviously on the first one you really understood. You know how important was to capitalize a company. Well just so that you never had to deal with running out of cash as you perhaps you know had to deal. Ah, with with price Matchs when you were going through the acquisition. But how did you think about the investors that you were bringing in and and what has been the journey as you were going from one financing cycle to another one. So.

Arthur Waller: So I really wanted to have again. This kind of scientific approach and so as well as you know we’ve done it for the ideation phase where we validated that you know again people at least when doing discussions with people that they had a pain point. Our solution looked like a proper one and people wanted to pay I then wanted to validate those assumptions for real, not just talking to people and for me, you know? So we first first thing is we wanted to go to market as quickly as possible and it’s not that easy. Ah, to go to market when you are building an accounting software because you don’t build an Mvp of an accounting software in a couple of months um and if you look at the the early days of 0 or Quickbooks. It actually took them very long time to take off because you know you just need to get. That that solid and robust ah base and there are lots of features that accountants require to do bookeeping and so when thinking about this we so the the fastest way to go to market is actually starting as an accounting firm. Ah, because this way we will hire accountants on our payroll they will know that the product is not ready and they will basically bridge the gap you know of the of the product and that way we will understand faster what accountants need in terms of features. And we’ll also validate that sms is by that value prop of having an accountant and a platform so that’s what we’ve done and we launched this approximately seven or eight months after having written the first line of code. Ah, we’ve done. We’ve operated as a tech enabled accounting firm. Basically for. Eight night months ah and and that’s when we really validated that there was demand strong demand from ss so from the moment we launched. We’ve signed up about 700 sms in friends and it was all hundred person inbound. No never any outbound so all people coming. Very high conversion rate and so we felt you know we validated that there’s demand we start to have a product that looks a bit more like what accountants need still not ready but bit better and so we felt it was the right time to raise the next round to really. You know, put fuel and and accelerate on building the right product for accountants. Um, knowing that from the beginning we sold our go to market would be through accountants. Um, so our first nine months have been smmes acquisition direct.

Arthur Waller:  And so then we raise our series a and from that moment. Our success metric has been ah acquiring Sms not anymore directly but acquiring them through accountants meaning accountants proactively take customers off their legacy software and put them on pendny name. Ah and that we’ve done. Basically in 2021 at the beginning of the year when we raised a series a it was 100 person of our business coming direct and 0 persons through accountants and at the end of the year. It was a 15 person coming direct and 85 persons through accountants and so for us it validated that. You know the second step that we were able to get product market fit in the sense. We had some accountants actually churning from the laxy software and using our product and if they use our product. It means that they save time they are more productive etc and so that’s when we. Because we started having accountants actually putting their customers over to penny lane that drove a lot very high gross. Ah because you know it’s a way more scalable go- to-market channel ah, and so beginning of this year we’ve actually decided to raise our series. B.Ah so with with the goal of basically ah, really cracking the product for accountants um and making sure that smmes you know like our product and that we are able to activate them engage them and monetize them and so the next steps for us or ah. Know really being on track to become the market leader in France um, both for accountants and for smes and also I would say getting to getting closer from having a ah more predictable business. Ah I would say I have. I’m getting to product market fit but I still don’t know my unit economics at all. Ah, because my my model is is complex I go to markets through accountants but sms end up paying me most of the time so I need to know exactly you know how many sms I’m I’m able to monetize. How much they’re getting to pay me on average how much and extra revenue I’m going to get a be able to get ah from nonas revenue from fintech revenue. Ah and and those are you know those will be will be for me the triggers. Ah for deciding it’s time to raise the next round. Which then will be more a matter of of ah you know hyper scale as well as internationalization.

Alejandro: And and in this case I mean imagine you go to sleep tonight and you wake up in a world where the vision of Penny lane is fully realized what does that world look like.

Arthur Waller: So it’s it’s a word where 90% of ah european sss and their accountants ah use penny lane. We are the market where it’s winner takes all um and those smes you know. Have access to the data all the time. Ah and a lot of stuff is automated for them in terms of administrative. Ah workload and accountants have become almost like the the Gps of thosesms and we send them active alerts. Telling them hey this this customer will run out of cache in three months I think you should call him and maybe offer them this and this and this and accountants spend less time doing bookkepping and and manual repetitive tasks and spend most of their time actually really advising their customer. And then pushing them the right service the right advice. Um, and hopefully all of this leads to having a stronger network of sms in Europe and I really believe that Sms is all the blood of of you know should be the blood of our european economy that. They hire people locally. They pay taxes locally and so our end mission. You know as penny lane is is really to help do the ses make better decision and grow their business and I think it can only help local communities and and and europe as a whole. Ah, so that’s that’s our our goal. Um, and I think if if you push it even further the day that will have done this ah you can have really big dreams and 1 example I give is you know once you have all. Hotels using Penny Lane in Europe you can tell a hotel hey did you know that you paid 10 person more than other hotels for your coffee. Do you want to to get a new coffee provider. Ah click here. Do you want to get another coffee provider cut the same but will be less CO 2 emissions emissions. Um, so if you push it even further. There are lots of business models that could you know be developed. For example, b 2 b wholesale marketplace or stuff like this. But I think the real key is you know being the single source of truth a financial data. And owning the attention of those sms and those accountants and then you know many people will have great ideas on what they can build on top and I’m sure I’m not even realizing what others might be able to build with this? Ah, no data and and attention.

Alejandro: And for the people that are listening. You know to get an understanding of the scope and size of penny lane today I mean anything that you can share in terms of numbers like employees or anything else that you feel comfortable sharing. So.

Arthur Waller: Sure, um, so yeah, the company was incorporated Two years ago we are now about 230 people most of them in tech in product about 60 first 2 thirds of them in tech in product and um, other than this. So.

Alejandro: Wow.

Arthur Waller: Ah, we are now equipping about 20,000 sms in France which is 1 person of of frenchsese and the goal is to equip eighty ninety person of them within next three 3 to 4 years which is the market share that Quickbooks and 0 have in their domestic markets. Um. Yeah I guess that’s it.

Alejandro: That’s humboo and and let me ask you this. So imagine I put you into a time machine and I bring you back in time maybe to that time that you are coming out of and Nyu where you’ve realized oh my god you know I want to do something I want to maybe like build a startup on my own and you had the opportunity of having a sit down. That younger Arthur Waller: and give you that younger and having the opportunity of giving that younger Arthur Waller: one piece of advice before launching a business. What would that be and why given what you know now.

Arthur Waller: I would say you know don’t sync too much. Ah, go and and just iterate. Ah and I say you know when you are young, you just you know you you you look at entrepreneur ah entrepreneurship like being a mountain. Ah, while I think you should really look at it as as something where you do test and learn and you do very small steps iterate. Ah, and so I think you know many people think having the right ideas is is the secret etc I think you know the right idea is actually it it matters. Ah, but I still think that you should just ask yourself the right questions. What is it that you want to build again. Do you solve a real problem etc and have a very structured approach. Ah that would be my first piece of advice and then ah you know, just run as quickly as you can ah with the right team. But this I don’t have any regret I was happy with with my cofounders but I think this is obviously you know one of the main reasons why people fail is that they don’t have the right team at the beginning.

Alejandro: So here’s a question for you. You know because a lot of people are probably thinking again about the number of cofounders that you have and how effective you been able to to to run you know the first company which ended up being an acquisition and now this next one with all these employees. Any piece of advice around streamlining the communication between co-founders or ah, how or any tips or any what’s the major thing that you’ve learned perhaps about having a very healthy relationship with cofounders.

Arthur Waller: So first piece of advice I think there should be no taboo I think all the cofounders should have a very open discussion at the beginning make sure that they agree that they can give hunes feedback to each other even if they are friends. And that this should not hurt their friendship so that would be my my number one advice and then I think it’s making sure that each cofounder has a very clear success metric that they are responsible for and again very clearly define scope. Um, and from there. I think ah having very regular touchpoints. Um, so still today we have a ah weekly meeting. Ah where we go through our okay rs we go through our success metrics and and we give each other we challenge each other and and. Ah, make sure that we steer in the right direction and then also on the on on a day-to day being very close sharing I would say communicating too much doesn’t hurt communicating not enough as is very likely to hurt. So. Always communicate too much and and rather than not enough.

Alejandro: I love it so Arthur Waller: for the people that are listening. What is the best way for them to reach out and say hi.

Arthur Waller: Ah, Linkedin is is the platform where I should probably be me will will be the most reactive.

Alejandro: Fantastic! Well Arthur Waller: thank you so much for being on the deal maker show. It has been an honor to have you with us.

Arthur Waller: Thanks a lot Bye bye.

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